Paramatrix Tech. (PARAMATRIX)

Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Profit growth of 23.40% with a P/E of 12.69 gives a PEG of 0.71, suggesting reasonable valuation relative to earnings momentum.
• Latest quarter net margin is healthy at about 21% (₹3 Cr net profit on ₹14 Cr sales).
• Piotroski F-Score of 7/9 indicates reasonably strong financial health signals.
• Promoter holding at 57.05% aligns management and minority shareholder interests.

Concerns

• Sales growth is only 1.51%, so the top line is nearly stagnant; profit growth may not be sustainable without revenue momentum.
• Dividend yield is 0.00%, offering no immediate cash return to minority shareholders.
• Book value, ROE, and Debt/Equity are not disclosed, making balance-sheet risk difficult to assess.
• Very small scale—market cap of ₹80 Cr and quarterly sales of ₹14 Cr—leaves it vulnerable to volatility.

AI Analysis

At ₹64, Paramatrix Tech is a tiny software consulting company—₹80 crore market cap, and a P/E of 12.69. I begin with business quality, and here the top line worries me: sales grew only 1.51%. A company with a wide moat would not have nearly flat revenue. Profit growth of 23.40% is pleasant, but it appears to come from margins, not from customers beating a path to the door. ROCE of 13.89% is decent but not the kind of return on capital that signals a durable franchise. I cannot compute book value, ROE, or debt-to-equity because those fields are unavailable; that lack of transparency is itself a caution. The Piotroski F-score of 7 out of 9 suggests reasonable financial health, and promoter holding of 57.05% aligns ownership with minority investors. That I like. But there is zero dividend, so I am wholly dependent on the business compounding internally. Latest quarter sales of ₹14 crore with net profit of ₹3 crore gives a 21% net margin—respectable for software services, but the scale is minuscule. The P/E of 12.69 and PEG of 0.71 say the market expects continued earnings growth. If profits can keep growing at 23% while sales stay flat, margins will eventually hit a ceiling. Graham taught me to buy dollar bills for less than a dollar; this may be reasonably priced, but I do not see a durable moat. I would call it a slow grower with improving efficiency, not a fast-growing compounder. I would need several more quarters of visible revenue growth, and better balance-sheet disclosure, before treating it as a core holding. For now, it is a small, interesting, but not wonderful business. I would insist on a margin of safety.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer